IS credit debt consolidation really helpful in lowering your bills? Is there a down side?

Question

have too many credit card bills,I want to lower the charges without damaging my credit

Answer 1

It depends on how you do it. If you go to a debt counselor ask them the question. Some organizations say that they help you by consolidating but that will put you on some kind of black list and make it harder for you to get credit. You should try to get a 2nd mortgage on your home to get the money to consolidate, then the interest is tax deductible.

Answer 2

As long as you pay all bills ON TIME (very important) and in the full amount they are asking for (the minimum) you won't damage your credit. The trick is to start paying the smallest ones down and off as fast as possible, and then work on the larger ones. Debt consolidation can be very helpful as long as you tear up the credit cards and don't revert to bad habits. Good luck.

Answer 3

Yes, it will lower your monthly payment, HOWEVER - this means it will take longer to pay off the debts, which means more interest paid.

If at all possible, pay off the smallest debt first and the minimums on everything else. Then take whatever you were paying them and ADD it to what you pay the second smallest debt (this is a debt snowball). Start with the smallest debt so you can see progress quickly (this will keep you eager to pay off the debts) AND will allow you to consolidate payments more quickly. Before long, your entire debt reduction payment will be going to your one, last reamaing debt

If you need extra income to do this, get a second (or third) job - temporarily! Have a garage sale or sell stuff on eBay.

Just make sure you have some money set aside in savings for emergencies ($500-1000). They will happen, so it's better to be prepared for them than to use high interest credit to cover them.

Answer 4

If you are thinking of using one of those debt management companies, be extremely careful and check them out thoroughly.

Many of those companies may leave you in worse shape than you are now.

I agree with the previous poster, bypass those companies and get a loan on your own to pay off the credit card bills. Not only will you be saving money by not having to pay that company, you will be saving money on interest, since you can probably get a short term loan for a much lower interest rate than your credit cards have.